Tuesday, 30 September 2008

Time to question their patriotism?

Much head-shaking about the “illogical” actions by the Democrats re: the bailout plan and yesterday’s vote.[1]

But suppose they’re not being illogical:

Before the 1994 Republican takeover, Democrats had sixty years of virtually unbroken power in Congress - with substantial majorities most of the time. Can a group of smart people, studying issue after issue for years on end, with virtually unlimited resources at their command, not come up with a single policy that works? Why are they chronically incapable?

Why?

One of two things must be true. Either the Democrats are unfathomable idiots, who ignorantly pursue ever more destructive policies despite decades of contrary evidence, or they understand the consequences of their actions and relentlessly carry on anyway because they somehow benefit.

Pelosi got up there and insulted the very people whom she insisted give her political cover on a bill she said she WOULD NOT JUMP for without the GOP; she then proceeded to play politics and lambaste them.

You know, it would be easier for me to believe this was a crisis, if the people in charge were acting like it was a crisis, instead of just an opportunity for graft. Then again, to some of these people, everything is just an opportunity for graft.

And contrast this:

Obama said in his television interview that he was inclined to support the bailout because it includes increased oversight, relief for homeowners facing foreclosure and limits on executive compensation for chief executives of firms that receive government help.

“None of those were in the president's provisions. They are identical to the things I called for the day that Secretary Paulson released his package,” Obama said. “That I think is an indication of the degree to which when it comes to protecting taxpayers, I was pushing very hard and involved in shaping those provisions.” - Fox News: “Obama: McCain’s Role in Bailout ‘Katrina-Like’”

Monday, 29 September 2008

This is a “discussion draft,” i.e., not the final version. There is still plenty of opportunity for mischief. I expected the first draft to be relatively clean and without any surprises; watch out for things that get added at the last minute.

Took a quick scan through the draft’s 110 pages, and IMO it pretty much falls in line with the earlier statements.

Commenters at Ace are concerned that the combination of Section 103 (excerpted):

SEC. 103. CONSIDERATIONS. In exercising the authorities granted in this Act, the Secretary shall take into consideration—

(1) protecting the interests of taxpayers...(2) providing stability and preventing disruption to financial markets... (3) the need to help families keep their homes and to stabilize communities...... [6 other considerations omitted]...

Combined with Sections 109-110 (excerpted):

SEC. 109. FORECLOSURE MITIGATION EFFORTS.

(c) CONSENT TO REASONABLE LOAN MODIFICATION REQUESTS.

—Upon any request arising under existing investment contracts, the Secretary shall consent, where appropriate, and considering net present value to the taxpayer, to reasonable requests for loss mitigation measures, including term extensions, rate reductions, principal writedowns, increases in the proportion of loans within a trust or other structure allowed to be modified, or removal of other limitation on modifications.

...SEC. 110. ASSISTANCE TO HOMEOWNERS.

...(2) MODIFICATIONS.—In the case of a residential mortgage loan, modifications made under paragraph (1) may include—

(A) reduction in interest rates;(B) reduction of loan principal; and(C) other similar modifications.

especially the “shall consent” language in §109(C) might constitute a backdoor mandate to the Secretary to “...turn high interest mortgages into low ones, forgive portions of the PRINCIPAL not just interest, etc. for people who borrowed too much f*cking money to begin with.”[1] I’m not enough of a lawyer to evaluate that argument, but I’ll agree that the use of “shall” instead of “may” bothers me.

Malkin sat in on the evening conference call, and has a large list of objections. Rather than repeat it here, I’ll just link... I urge you to read the whole thing. Here’s one reason:

Saturday, 27 September 2008

Senator Jim DeMint talks with John Hawkins about the bailout

One more wrinkle:

The biggest creditor is China and that’s a big part of this equation that’s not being talked about. If America was not in such deep debt, we could deal with this problem much more effectively -- but China has essentially told the U.S. that we make good on all the debt that they're holding, which is nearly a trillion dollars, or they're going to stop lending us money. To show that they’re serious, they’ve already stopped lending us money and if we can't borrow money every day, literally hundreds of billions of dollars, we default on the loans that are coming due.

So, this is a house of cards that the government has created and my biggest frustration with this whole mess is that it is being blamed on free enterprise, capitalism, and corporate greed -- when in fact, this is a good example of what happens when the government gets involved in the private sector.

John Allison, CEO of BB&T, has published an open letter on the “rescue plan.” Some of his points:

There is no panic on Main Street and in sound financial institutions. The problems are in high-risk financial institutions and on Wall Street.

It is extremely important that the bailout not damage well run companies.

This is a housing value crisis. It does not make economic sense to purchase credit card loans, automobile loans, etc.

The proposed bankruptcy “cram down” will severely negatively impact mortgage markets and will damage well run institutions. This will provide an incentive for homeowners who are able to pay their mortgages, but have a loss in their house, to take bankruptcy and force losses on banks.

If we had Fair Value accounting, as interpreted today, in the early 1990’s the United States financial system would have crashed. Accounting should not drive economic activity, it should reflect it.

Friday, 26 September 2008

The MV Iran Deyanat was brought to Eyl, a sleepy fishing village in northeastern Somalia, and was secured by a larger gang of pirates... Within days, pirates who had boarded the ship developed strange health complications, skin burns and loss of hair. Independent sources tell The Long War Journal that a number of pirates have also died. “Yes, some of them have died. I do not know exactly how many but the information that I am getting is that some of them have died,” Andrew Mwangura, Director of the East African Seafarers’ Assistance Program, said Friday...

News about the illness and the toxic cargo quickly reached Garowe, seat of the government for the autonomous region of Puntland. Angered over the wave of piracy and suspicious about the Iranian ship, authorities dispatched a delegation led by Minister of Minerals and Oil Hassan Allore Osman to investigate the situation on September 4....Once in direct contact, the pirates told Osman that they had attempted to inspect the ship’s seven cargo containers after they developed health complications but the containers were locked. The crew claimed that they did not have the “access codes” and could not open them. The delegation secured contact with the captain and the engineer by cell phone and demanded to know the nature of the cargo, however, Osman says that “they were saying different things to different people.” Initially they said that the cargo contained “crude oil” but then claimed it contained “minerals.”

Monday, 22 September 2008

Stephen Segal explains...

Why parents aren’t scared when their kids go steampunk:

People think of goths as weirdoes who take vampires too seriously, and therefore they can’t help being worried on some level that a crazy goth might, you know, want to make them bleed. Whereas steampunks are — what? Weirdoes who take pocket-watches too seriously? What are they gonna do, vehemently tell you what time it is? - Five Thoughts On the Popularity of Steampunk

Saturday, 20 September 2008

The Green movement has become dangerous for the survival of our society. It is surely time to stop pandering to its often ridiculous whims and fancies. We have been far too kind to its utopianism. Politicians of all parties have become enfeebled by indulging its fanaticism and unrealistic proposals, especially on food and energy. This has led to inertia, and to a serious failure to act when action is urgently required...

Generation capacity in the U.K. will actually decline by 23 gigawatts by 2020, thanks largely to government pandering to “green” activists. And things are not all that different in this country.

Whether they’re communists, utopian socialists, Malthusians, or just stupid is beside the point. We must stop giving the “greens” a pass for having “good intentions,” and start holding them accountable for all the consequences of their policies.